Application Of Spatial Equilibrium Model To China's Meat Products Market

Recently with regionalization and specialization in animal husbandry production, domestic trade liberalization of livestock products in China has been accelerated continually. In this background, livestock products market in China trends to spatial integration, while the livestock products prices and trade flows among provinces are more connected. And under the framework of WTO (World Trade Organization), the development of provincial animal husbandries will present different situations, owing to the differentiation of factor in endowments and level of local economic development among provinces. How is the basic pattern of local distribution and interregional trade flows of China's livestock products market? How is the connection among the local livestock products markets? And how will such connection be evaluated? It is important to answer these questions for policy-making and macro-regulating on China's animal husbandry and livestock products market.Meat market plays an important role in livestock products market of China. To have a better understanding of those questions aforementioned, this thesis provides a simulation and description of the current spatial pattern of China's meat market distribution. The overall goals of this thesis are to explore the main factors that affect it and its potential trends, and to provide a comprehensive overview of future China's meat market.In order to achieve aforementioned objectives, Spatial Equilibrium Theory was introduced to this thesis, and taking account of the characteristics of China's meat market, China's Meat Market Spatial Equilibrium Model (CMPSEM) is established. The structural model of CMPSEM includes meat products supply, demand, and interregional trade flows. And the principal factors that affect those three phrases (like spatial arbitrage principle) are considered. The potential spatial structures of meat market are modeled using spatial equilibrium framework, while the factors change. This is the predominant feature and innovation of this thesis. Spatial equilibrium theories are a series of perfect theory and methodology that were used in studying international trade flows. And it also is applicable to analyze general agricultural products markets, so this thesis will contribute to the relevant researches in this field.In the following part, empirical study was employed to analyze China's meat market and to get the parameters required in CMPSEM, including the demand elasticties and supply elasticities. The data utilized in this thesis are second-hand data that are published in Statistical Yearbook. In view of many problems of overestimating meat production and underestimating meat consumption in second-hand data, the causes of those are analyzed and data adjustment is conducted in this thesis.Having obtained the parameters required in CMPSEM, something must be done to test the validity of CMPSEM. Based on the baseline scenario (reflecting the situation of China's meat market in 2000), the current meat market distribution is simulated, and the comparison between it and real situation shows that CMPSEM is robust to model the real world. After that, various alternative scenarios are formulated on consumption expenditure, price of feedstuff, production technology, transportation cost,tariffs and etc, and simulated by GAMS. The comparison between base scenario and modeling results of various alternative scenarios shows that various policy variables have an effect on the meat supply, demand and trade flows among regions, which influences the national meat market in China.Ultimately, combined with national economy, animal industry and something like that, a simple projection about the future meat market is made out.